Over the past 10 years, we have been studying two phenomena in cloned populations of CD4+ T lymphocytes referred to as costimulation and anergy. Both affect the production of the T cell growth and differentiation factor interleukin-2 (IL-2) produced following antigen activation of these cells. Costimulation entails a 30 to 100 fold enhancement of IL-2 production when signaling through the antigen-specific T cell receptor is supplemented with signaling through the CD28 receptor on the same cell. Clonal anergy is an anti-proliferative state that the T cell enters when it only receives a signal through the antigen-specific receptor. In this case, subsequent re-stimulation of IL-2 production, even in the presence of co-stimulation, is inhibited 10 to 50 fold. Our goals in this project have been to try and understand the molecular mechanisms behind these two phenomena.[unreadable] The prominent affect that costimulation and anergy have on expression of the IL-2 gene has led us to explore its chromatin structure and transcriptional regulation. In published work we studied the role of DNA demethylation in transcriptional regulation of the IL-2 gene. We identified a 600 bp region in the promoter/enhancer of this gene that demethylates in nave T cells following activation with anti-CD3 and anti-CD28, and remains demethylated thereafter. This epigenetic change was necessary and sufficient to enhance transcription in reporter plasmids. The demethylation process started as early as 20 minutes in vivo after potent stimulation with a superantigen and was not prevented by a G1 to S phase cell cycle inhibitor that blocks DNA replication. These results suggest that the demethylation process proceeds by an active enzymatic mechanism and suggests the existence of a site-specific demethylase. We hypothesise that the major function of this event is to enhance the amount or rate of transcription of the IL-2 gene in memory T cells in order to facilitate the rapid production of this cytokine in a secondary immune response.[unreadable] During the past year we have set up a transfection assay to try and functionally detect a demethylase activity in T lymphocytes. An eGFP reporter plasmid was engineered to be regulated by an 8.4 kb fragment of the IL-2 promoter/enhancer or by a mutated form of this promoter/enhancer in which 7 of the proximal CpG sites were altered so that they could no longer be methylated. These plasmids were then methylated (or not) in vitro with the Sss1 methylase and transfected into nave CD4+ T cells from the D011.10 TCR transgenic. Expression of eGFP was then induced by stimulation of the cells with a phorbol ester (PMA), the calcium ionophore ionomycin, and anti-CD28. The wild type plasmid expressed eGFP with a half maximal time of 6.7 hours. When the introduced plasmid was methylated prior to transfection, the expression time was delayed until 9 hours. However, if the IL-2 promoter of the plasmid had been mutated to eliminate the 7 CpG sites, then methylation had no delaying effect on the eGFP expression (6.9 hours). These results raise the intriguing possibility that a demethylase activity can be induced in CD4 T cells following activation.